Commercial property investment activity in France totalled EUR 2.4 bn in the first half of 2009, the lowest level in 12 years, according to a new research report issued by Colliers this week. The figure is nearly 70% down on 2008 volumes.
Commercial property investment activity in France totalled EUR 2.4 bn in the first half of 2009, the lowest level in 12 years, according to a new research report issued by Colliers this week. The figure is nearly 70% down on 2008 volumes.
Investment volume picked up moderately in Q2 while there were a number of high-profile transactions after a slack Q1. 'This suggests that the market is about to stabilize and that investors may be ready to make a return,' Colliers said.
In a context marked by increasingly restrictive credit conditions, domestic players with ample equity have been the most active investors. SCPIs and OPCIs in particular are increasingly active and now account for 14% of the total investment volume. Listed property companies continue to recycle the assets in their portfolios and have released mature properties back onto the market.
As in 2008, international investors remained on the sidelines, accounting for a 35% share of the total investment volume. Opportunistic US and UK investors (13%) were chiefly involved in very large transactions while German investment funds (7%) remain committed to the French investment market while focusing on assets with very secure income streams.
Office property accounted for 53% of total investment in the first half versus a level of 80% during the last peak in the investment cycle. Of this total, 75% of capital commitments were located in Greater Paris with half located in the Paris CBD. The combination of risk aversion and the resistance of sellers to lowering their prices dampened the investment volume in the French regions, where the value of property transacted was just below EUR 300 mln.
